Back
3 Jul 2014
ECB holds monetary policy but remains alert - ING
FXStreet (Łódź) - Carsten Brzeski from ING observes that despite staying on hold in July, the ECB the obviously remains in a state of high alert and even presented a surprise for all ECB watchers.
Key quotes
"The ECB still expects the gradual recovery of the Eurozone economy to continue. Inflation remains low but should, according to the ECB, move closer to 2%. Interestingly, the ECB refrained from adding an expected date to when this would happen."
"The ECB released technical details on the TLTROs after the meeting and repeated its willingness to start an ABS purchasing programme and in a worst-case scenario even a broader asset purchasing programme."
"Draghi’s remarks on the ABS programme, however, still leave some uncertainty on whether it will ever happen. Normally, as soon as Draghi starts talking about coordinating ABS preparatory work with other international bodies, this is a clear sign that it won’t happen soon."
"In the absence of shocking monetary policy decisions, the ECB presented another surprise when it announced that the rate-setting meetings will follow a six-weeks-rhythm (instead of the current 4-weeks), starting January 2015. Moreover, the ECB will start publishing some kind of minutes of these meetings next year."
"All of this means that the ECB will remain in this state of high alert for a long while. Draghi’s comments on the latest BIS warning on the possible negative impact from too accommodative monetary policies and hints at possible new actions were very clear."
Key quotes
"The ECB still expects the gradual recovery of the Eurozone economy to continue. Inflation remains low but should, according to the ECB, move closer to 2%. Interestingly, the ECB refrained from adding an expected date to when this would happen."
"The ECB released technical details on the TLTROs after the meeting and repeated its willingness to start an ABS purchasing programme and in a worst-case scenario even a broader asset purchasing programme."
"Draghi’s remarks on the ABS programme, however, still leave some uncertainty on whether it will ever happen. Normally, as soon as Draghi starts talking about coordinating ABS preparatory work with other international bodies, this is a clear sign that it won’t happen soon."
"In the absence of shocking monetary policy decisions, the ECB presented another surprise when it announced that the rate-setting meetings will follow a six-weeks-rhythm (instead of the current 4-weeks), starting January 2015. Moreover, the ECB will start publishing some kind of minutes of these meetings next year."
"All of this means that the ECB will remain in this state of high alert for a long while. Draghi’s comments on the latest BIS warning on the possible negative impact from too accommodative monetary policies and hints at possible new actions were very clear."